NY Comptroller Proposes Industry Fund to Pay for Fracking Damage

With New York State poised to lift a years-long ban on high-volume, horizontal hydraulic fracturing, the state’s comptroller is calling for the establishment of an industry-supported fund to pay for potential environmental damage caused by the controversial natural gas drilling technique. According to The New York Times, Thomas DiNapoli, will propose legislation today that would set up such a fund.

New York’s moratorium on natural gas drilling via high-volume, horizontal fracking officially expired on July 1, and as we’ve reported previously, Governor Andrew Cuomo is expected to allow fracking to commence at some point in the near future. The same day the ban expired, the New York Department of Environmental Conservation (DEC) issued a report recommending that fracking be allowed on most private lands in the state, with the exception of the environmentally sensitive watersheds that supply New York City and Syracuse with drinking water. Such drilling would also be banned within primary aquifers and surface drilling prohibited in state parks and other state-owned land.

If the DECâ€™s recommendations are adopted, as appears likely, 85 percent of the Marcellus Shale in New York would be accessible to natural gas extraction via fracking.

In fracking, a cocktail of water, sand and chemicals is injected into the ground at high pressure to shake loose gas and oil deposits. Opponents of fracking are concerned that this type of natural gas drilling could lead to pollution of vital drinking water sources, either through the release of naturally-occurring hazardous substances or as a result of spills or leaks involving fracking fluid or fracking wastewater.

â€œGiven the great concern that many have, if we do go down this road, to provide this level of protection, I think, makes a lot of sense,â€ DiNapoli told The New York Times,

DiNapoli’s proposal would give private landowners recourse outside of the courts for obtaining compensation if their property is polluted by fracking or other forms of natural gas drilling. The legislation, which is inspired by a fund New York established in the 1970s to pay for oil spill damages, would require operators to post surety bonds for the natural gas drilling they undertake.

According to the Times, the legislation would also:

â€¢ Impose a surcharge on drilling permits to supplement the financing available for environmental cleanup.

â€¢ Allow state regulators could order immediate remediation after a drilling accident.

â€¢ Allow state regulators to take control of a contaminated site to initiate emergency cleanup.